2017 has been a great year for Bitcoin price. The digital currency is the most popular and its price has gone up by over 740%. The price is still going up and is showing no signs of slowing down. However many analysts are now warning that it has entered into a bubble territory and had a possibility of crashing. Normally when there is a bubble busting is always very close.
Whether Bitcoin is bubbling or not this is just a debate. The only ware you can compare with other assets is to look at Bitcoins value and compare with its price. The valuation is not easy since everyone comes with their own talk. According to Van-Petersen of the Saxo Bank Bitcoin can even be worth over $100,000 USD. This is if it can grow to account for 3.5% of average daily volumes (ADV) of global fiat currency in a decade.
With the estimated growth by Van-Peterson, that means that the digital currency accounts for $175 billion of the average daily volumes. With would also mean looking at market cap Bitcoin would control $1.7 trillion based on a multiple of 10*ADV to account for the next 10 years. If we take the market cap figure and divide by the 17 million Bitcoin that is estimated to be in circulation in 2027, then the estimated price will be about $10,000 per coin.
Even though many people are predicting its bust in 2018, we don’t think the currency is near its optimal value.
Is it good to buy Bitcoin now?
Bitcoin is a good investment area especially because it has no relationship with any other asset. However, I would not advise you to throw all your investment in it. It’s an investment area that has a very high risk. I would advise you to invest a small allocation and try other platforms for diversification. This would mean if the crashing talk came to pass you are still safe.